Insurance Marketplace Realities 2024 – Environmental

Rate predictions: Environmental

	Trend	Range
Contractors’ pollution liability (CPL)		+5% to +10%
Site pollution liability (PLL/EIL)		+5% to +15%
Combined environmental + casualty/professional/excess		+5% to +15%

Despite global economic turbulence, client need and carrier appetites for environmental coverages remain strong in our marketplace.

• While some investors await better economic certainty, the application of environmental insurance has become even more essential for mergers, acquisitions and real estate transactions.
• More than ever, authority approval from carrier leadership is needed on complex and larger capacity environmental programs.
• Following a period of market consolidation, environmental market capacity remains stable with few new market entries.

Emerging exposures and opportunities continue to fuel the creation of new environmental products and the reimagined use of some old ones.

• PFAS (per- and polyfluoroalkyl substances) restrictions are now common across most property and casualty lines, although environmental coverage may be secured for companies that can demonstrate de minimus exposure.
• New developments in risk transfer products or combinations of existing products are being applied to new environmental opportunities, such as carbon sequestration (natural resources) and reps and warranties (M&A).
• Ethylene oxide (EtO) continues to emerge as a potential contaminant to watch.

The magnitude and frequency of recent environmental claims have shaped carrier behavior and appetites.

• Rising remediation costs have moved carriers to take a more active role earlier in the claim process to mitigate losses.
• Major losses arising from ancillary environmental coverages, such as transportation and non-own locations/disposal sites, serve as a reminder of the importance of these coverages.
• Twenty years on, carriers continue to offer affirmative coverage for indoor air quality (IAQ) issues, such as mold and Legionella, but many employ various underwriting tools (class of business, named peril, per-door deductibles) to mitigate their exposures.

Environmental exposures in the construction industry persist and are expanding.

• Excessive siltation and stormwater exposures continue to yield large pollution claims for new construction projects.
• Redevelopment-related claims arising from pre-existing conditions, soil and water management and voluntary site investigations are commonplace.
• PFAS restrictions are now encountered on construction-related programs.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

Contact

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Brian McBride

Head of Environmental Broking, WTW

email Email phone +1 404-224-5126

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